AML / OFAC Side Letter Clause
(Private Equity Fund)

Summary

This AML / OFAC side letter clause for a private equity fund (PEF) is to be used when the PEF is willing to give the investor certain assurances relating to anti-money laundering (AML) and Office of Foreign Assets Control in the United States Department of the Treasury (OFAC) obligations. This clause includes practical guidance and drafting notes. This AML / OFAC side letter clause is drafted assuming that the PEF is a domestic limited partnership. Note that the legal form and jurisdiction of a PEF can vary, and accordingly, the terms of the AML / OFAC Clause can also take on several formulations, depending on structure. For example, if a PEF is a corporation or company, rather than a partnership, the clause would reference the PEF instead of General Partner and shares instead of interests. Further, if the PEF is a non-U.S. entity with a non-U.S. general partner / investment manager, the terms of this clause may not even apply. See Onshore/Offshore Structuring Issues for Private Equity Funds for a discussion of PEF structuring variations and Anti-Money Laundering Considerations for Private Equity for guidance on the AML framework applicable to PEFs. This clause should be read in conjunction with the practice notes Private Equity Fund Documents: Drafting and Review and Side Letter Drafting for a Private Equity Fund. This clause assumes that it will be included in a side letter with a PEF. See Side Letter for a Private Equity Fund for an example.